The Drax Group plan to equip a power plant in northern England with carbon capture technology was rejected by the UK government’s carbon capture program.
Earlier this month, the UK government announced its £20 billion ($24 billion) budget dedicated solely to boosting carbon capture efforts in the country, which is the second largest investment of its kind following the amount included in the Inflation Reduction Act in the US.
Shortly after the announcement, Drax hit pause on its planned $2.45 billion investment in bioenergy with carbon capture and storage (BECCS) in the UK, saying it expects to receive more clarity on government support.
And now, the Department for Energy Security & Net Zero announced that the British power generation company’s BECCS plan failed to get what is known as Track-1 status.
Track-1 status is what is necessary to be eligible for subsidy arrangements with the government, and several industrial clusters in the nation have already been granted Track-1 status.
The decision to reject Drax, however, represents a huge setback for biomass in the UK, which currently is in desperate need for more stable electricity generation.
Furthermore, the government’s rejection now puts Drax in a position of having to choose between focusing on its domestic operations or looking across the Atlantic, where the US is offering generous subsidies for carbon capture.
Drax already has heavy investments in pellet production in the United States as it is, and now the company may be looking to build a BECCS plant there as well.
“Track-1 is not the extent of our ambition,” the UK government said in a statement, although it also added it would engage with the company further and still remains committed to carbon removal.